5) A sole surviving spouse that inherits a Roth IRA and elects to assume ownership uses the clock of the deceased spouse unless surviving spouse already owns a Roth with a clock that started earlier. What happens if there are multiple surviving spouses? :confused --vtMaps 1) There can only be one s...

Note that the 1099R reports distributions and the 5498 reports contributions and year end value. For a Roth conversion, the 1099R show the TIRA account you converted from, and that same amount will be a conversion contribution on the 5498, so the 5498 will be issued for your Roth IRA that received t...

Sure.. the $100 will be tazed after retirement, but I would be a free (pre-tax) $100 If they are returning $1100, that would make more sense. But once you start moving the money around (rollovers, investing and selling into funds), it would seem difficult to track where the money came from. In othe...

More about the 5 year clock for determining when distributions are qualified. The Regs indicate that the clock starts with your first contribution, but to drill down on that: 1) Any contribution that is an excess contribution does NOT start the clock 2) Any contribution that was fully returned with ...

Uncooperative and procrastinating co beneficiaries is a major nuisance, as is maintaining multiple accounts. When matched with a custodian with poor consumer practices, completing basic transactions can become a hassle. If you sense that this might be an issue with your beneficiaries, you might get ...

VTSAX ER is .04%. For 700k in your plan each additional .01 will cost you 70 per year. If the plan equivalent option has an ER of .14 you will pay 700 more per year. And there could be additional costs in the 401k beside just the ER for the equivalent option. Your employer will probably have to be q...

See p 7 of the 1099R Inst (Distributions under EPCRS for excess annual additions). These are coded E on the 1099R. Here is a portion from that p 7: For a return of employee contributions (or designated Roth contributions) plus earnings, enter the gross distribution in box 1, the earnings attributabl...

You don't have any pre tax retirement accounts or taxable savings? If you can take out several thousand dollars from an old 401k for example before you create taxable income, you should at least not tap the Roth until you otherwise withdrew amounts from the pre tax accounts up to where your 10% or 1...

By mistake, last year I over contributed over the 54k limit with after-tax 401k. Just a few hundreds. I am told by Fidelity that this summer they will review it and send me a check for the over contribution. Everything is invested on a target fund, so I guess they'll have to sell some shares? What ...

The second contribution was NOT made within 60 days of the distribution, so it was not rollover eligible. Therefore, no sense in trying to get the new custodian to code the contribution as a rollover. What you have is a second 2018 contribution, which is an excess contribution. What was not stated w...

Per IRS Reg. 1.401(a)(9)-8 QA 6, the RMD for an alternate payee under a QDRO is subject to the RMD rules applicable to the participant. Therefore, even if the participant was not subject to RMDs at the time of a QDRO, but became subject to RMDs (reached the required beginning date) later on, RMDs wo...

If you decide to assist with on going expenses and your payments will last for an extended period, the child might acquire a sense of entitlement for the assistance. if a sense of entitlement develops, you will have a problem if you want to stop or even reduce the payments. This could occur if the c...

My wife recently transferred $13,000 to VG from an old IRA account with another firm that her parents had funded for her. Vanguard put the incoming funds into a "Traditional IRA Brokerage Account" and the funds are currently held in the Vanguard Federal Money Market Fund. Before we do anything with...

We have a CPWROS taxable brokerage account with Schwab with a designated beneficiary and a contingent beneficiary. Therefore, if the primary bene pre deceased the last spouse, the funds would go to the contingent. The options are very flexible, for example a contingent beneficiary could be either p...

We have a CPWROS taxable brokerage account with Schwab with a designated beneficiary and a contingent beneficiary. Therefore, if the primary bene pre deceased the last spouse, the funds would go to the contingent. The options are very flexible, for example a contingent beneficiary could be either pe...

Question: The Wells Advisor told me that they wouldn't do the TOD until they had transfer forms from all beneficiaries. That wasn't a problem in our case except for the long mailing times for two of us. Is that normal? What if the beneficiaries aren't cooperative or very slow. My Vanguard transfer-...

Since this 401k is from a former employer, you could do a direct rollover from the pre tax portion in the amount you want to be taxed on direct to your Roth IRA. Generally, other than creditor protection issues in some states, the Roth IRA provisions are more beneficial than Roth 401ks: 1) No RMDs o...

This is not an individual situation. Anyone that shops their renewal price is likely to go with the lowest quote. The lowest premium at any point in time comes from the carrier that is most underpriced and needs to increase their rates to stem the tide of losses. Therefore, your premiums will rise f...

Ramp up your charitable donations to manage your income down to where it needs to be? This will not reduce modified AGI for regular Roth contribution purposes, it will only reduce taxable income. However, if you are over 70.5 a QCD WILL reduce your modified AGI by keeping all or part of your TIRA d...

Be aware that the following are just ballpark guesses: 1) The IRS rules allow all qualified plans to accept IRA rollovers. 2) Perhaps 60% accept IRA rollovers of all IRAs 3) Perhaps 80% accept IRA rollovers only of rollover IRAs (formerly "conduit IRAs") 4) That leaves 20% that will not accept any I...

One more thing to consider -- we were told that joint taxable accounts at Vanguard can't designate beneficiaries. Thanks! That is definitely good to know. It is good to know, but it is not a good restriction. Most other brokerages allow a CPWROS to name a TOD beneficiary who will inherit directly u...

Recharacterizations are not more complicated than before. Here is what changed: 1) Recharacterization of conversions have simply been eliminated 2) Recharacterizations of regular contributions to a different type of IRA account remain unchanged. The key to the back door Roth is not having any pre ta...

In general, low cost of living, low or moderate taxes, and generally warm whether can be found in the south Atlantic or states on the Gulf of Mexico. However, in many of those areas the good weather comes with the catastrophe risk of major hurricanes or sometimes tornados. This exposure is worse if ...

You can consolidate them. Request a direct trustee transfer into the surviving IRA account. As a non reportable transfer you will not get a 1099R and will not need to report the transfer on your tax return. If you will not be making any further SEP IRA contributions, transfer the SEP balance into on...

The LTC market has been dysfunctional for years and is only getting worse as adverse selection is added to the mix. The term "death spiral" comes to mind. Under current circumstances this product should be avoided and the exposure self insured. Also, be aware of the bundling of LTC with other produc...

The TSP Modernization Act authorized expanded distribution options for employees and retirees and this may take a couple years to fully implement. But there was nothing in the Act to improve beneficiary options, and given that there is no pending legislation and it takes the TSP a couple years to im...

There shouldn't be any rollback. The original IRA distribution of after tax money was not eligible for rollover to a qualified plan, so it must be reported as a distribution. It would not be taxable if it did not exceed the basis in the TIRA, but must be reported on line 15 of Form 1040. It was roll...

OK, is this correct? 1) You requested a distribution in 2017 (perhaps the inherited Roth RMD?), but the custodian did not make the distribution until 2018. 2) You said you received a 1099R for the distribution coded T, but the custodian would not issue a 2018 1099R until Jan, 2019. Are you sure the ...

I just got a notice today from custodian they said will do a new 1099-r with a removal of excess. They will reclassify the $5000 contribution to 2018. I was wondering if they were to do this would they properly do it? Would they do a corrected 1099-r with a $0 amount? How did this situation morph i...

You can only change the custodian by doing a direct transfer to a new custodian. If you receive a check payable to you personally, the entire balance will be taxable and you will no longer have an inherited IRA. But as livesoft indicated, you can purchase brokered CDs if your current custodian provi...

They issued in 2017 because I sent it in 2017. They originally told me I past the deadline then they told me they won't issue the 1099-R but they issued it anyways today which is 1 1/2 months after the due date. In reality it is simple to do but the CPAs has a required minimum fee of $500 if i do a...

Before you have the will or trust prepared, you will need to give some serious consideration with respect to the executor/trustee of these instruments. Of course, these decisions can be changed, and probably will be if you are relatively young, but if you are older making the proper selection when t...

While you can transfer IRA assets in kind to taxable, whether RMD or amounts in excess of RMD, actually hitting your RMD to the dollar is not likely to happen unless you transfer some cash. Since ETFs change value constantly and you do not know for sure exactly when the transfer is executed, you wou...

I received a 1099-R Form with several thousands dollar under Gross Distribution box 1 and the box 2b taxable amount not determined and distribution code T. Basically I complained to my broker asserting that the 2018 distribution was suppose to be for tax year 2017. They told me they won't fix it an...

There should be two 1099R forms even though some firms combine on a single 1099R because the Box 7 code is G for both. However, the instructions for Boxes 2a and 5 differ depending on the type of destination account IRA. For a qualified rollover contribution to the Roth IRA, 2a + 5 must equal Box 1....

They can see the transfer has been executed, and the funds will arrive by the settlement date for investments purchased with the transfer funds.
Anyone know what happens if the funds do not arrive in time? Assume no margin account.

Individual securities do not have a basis in an IRA, only the TIRA itself has a basis. That basis will be 5500 if this is your first non deductible contribution. The recharacterization process is driven by a formula that determines what amount of gain or loss occurred in the Roth IRA after you made ...

Schwab sent a letter to my wife about closing her former employers 401k. I spoke on the phone to Schwab about the process to Rollover the money into a Vanguard account. Called Vanguard and spoke to them about setting up a Rollover IRA account. Spoke to Schwab and gave them the IRA rollover account ...

Yes, that would work if you do have another owned IRA. However, if you do not there is another solution, but it is not as efficient as first electing to assume ownership before taking a distribution. You could take a distribution from the inherited IRA equal to the Uniform Table RMD and because that...

I would take the advisor's untruthful comment about Schwab's customer service as a red flag regarding everything else she indicated. Schwab's customer service is much better than Vanguard's, and even Vanguard management admits they have issues. Ameriprise may or may not have decent service, but if t...

My spouse died in 2011 at age 63. I chose to hold her IRA as beneficiary for seven years in order to delay RMDs and allow the account to grow. This year (2018), I will be 76 and she would have been 70 1/2. I had planed to assume her IRA as my own this year in order to benefit from the lower RMD req...

When a Roth 401k balance is rolled into a Roth IRA, the new balance in the Roth IRA shifts to Roth IRA accounting. A Roth IRA distribution then follows the Roth IRA ordering rules you are probably familiar with. The amount of elective deferrals to the Roth 401k are shown in Box 5 of the 1099R for th...

Not a whole lot of options. If you are going to retire before mid 2020, you could defer your 2019 RMD to early 2020. That would move taxable income from 2019 to 2020 when your net employment income would be lower. I assume that you do NOT have another job with a 401k into which you could roll the SE...

No specific guidance located, but Pub 525 states that a loss on excess deferrals goes on line 21, but no mention of a loss on excess contributions or excess annual additions. It appears that such a loss cannot be claimed.

I have been contributing to my after tax 401k and then doing the mega backdoor Roth through Fidelity. I then transfer the FIDO Roth to my USAA Roth that I use for regular backdoor Roth every year. My question is on the ordering rule now that I have rolled my FIDO Roth into my USAA Roth. I cannot fi...

You should be able to do a direct transfer of the portion you want to own into a new owned TIRA account and maintain the current inherited IRA as a penalty free source of distributions until you reach 59.5. Verify with the custodian that this transfer will not be reported on a 1099R and will be trea...

With much fewer IRS returns including Sch A, more states will likely approve itemizing when the standard deduction applies to the federal. Here is what New York is doing: Standard and itemized deductions The New York standard deduction is maintained for single filers. In addition, the legislation el...

Either way, you will get a separate 1099R for the .54 coded B1 and it will show .54 as taxable in Box 2a. Since you need to report it anyway on line 16a and 16b of Form 1040 and will round up to only 1.00, it is too small to bother rolling over to your Roth IRA. The early distribution penalty will r...